Bob Minsky: A society addicted to greed

During all the furor over the current financial crisis, it was stated many times that some of the financial institutions had become so big, their influence and tentacles had infiltrated so much of the financial industry, the country could not allow them to fail.

I guess that is the same as saying, if you grow big enough and capture enough entities invested within your management and control, you attain a guaranteed no-fail status — this regardless of how financially immoral, corrupted and irresponsible their policies are. This has prompted an arrogance and insensitivity never before exhibited in our history.

The question I have is, should any company be allowed to grow that big? Should any company be allowed to grow so big that its failure could devastate the entire American financial spectrum?

In July 1890, the United States enacted the Sherman Anti-trust Act. Reading a description of the act, it appears the government wanted to protect the American people from any company or agency monopolizing any segment of their respective market to the extent effective competition would become impotent. Under that scenario, banks and financial institutions would not be affected since, in spite of their size and scope of influence, competition did exist.

But, the damage being done to the American economy is as bad or worse, so how does the government legislate a control mechanism to keep institutions from growing so big without destroying the free enterprise system that has served this country so well?

Capitalism, in spite of all its pitfalls, has blessed America with opportunities and wealth. It is a dilemma of monumental proportions. Via capitalism and the free market system, Americans attained great wealth and prosperity. A world of opportunity opened up for those willing to work for it. The caveat was you didn't get something for nothing.

Some people, through unique and innovative talents, achieved great wealth; many achieved comfort and security through hard work and application, while others did neither or, through misfortune, fell by the wayside. An economic utopia for the rich and reality for everyone else. The system worked reasonably well until the monster "greed" raised its ugly head. Suddenly being rich wasn't enough. Then being rich enough wasn't enough. Suddenly it was no longer a question of how much compensation a person deserved, but how much a person could get. Amassing wealth above and beyond what was needed created an addiction to wealth. And those afflicted would steal, cheat and commit any and all acts to feed that addiction.

Why else would some people who had amassed millions — more than they could spend in their lifetime, more than they needed to sustain a lifestyle most of us could only dream of — cheat and steal to get more? It was no longer ambition; it was addiction to wealth and power. As with any addict, they no longer have the ability to control their inhibitions and the damage they cause always impacts others.

Our economy could absorb isolated incidences, but when it becomes epidemic in proportion, the salvation of our economy and the ability of the masses to sustain a reasonable quality of life become endangered and demand action.

Simply said, but not simply done. Addicts do not often submit willingly to treatment. So society has to decide what is more important, its survival or the addicts? Equally important is how to treat the addicts, how to rebalance the mechanics of our economic system within the framework of our judicial and legislative constraints. How do we guarantee the cure will not be worse than the disease? That is the question.